Nvidia (NVDA) Stock Falls 3% as Inflation Data Deepens Chip Sell-Off

TLDR

• Nvidia (NVDA) fell 3.2% to $221.30 on Wednesday, after closing at $228.52 the day before.
• Hotter-than-expected September inflation data raised fears of more Fed rate hikes and a higher cost of capital.
• CoreWeave (CRWV) dropped more than 16% on debt worries, while ASML, Micron and SK Hynix also fell.
• Analysts still rate NVDA a “Buy” with an average target of $321.89, and the board approved a $150 billion buyback.
• TSMC reports earnings Thursday, with investors expecting quarterly profit to rise 60%.

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Nvidia (NVDA) stock fell 3.2% on Wednesday to $221.30, leading chip stocks lower. It had closed at $228.52 the day before and traded as low as $219.64 during the session.

NVIDIA Corporation, NVDA

Volume was lighter than usual. About 116.5 million shares changed hands, 23% below the average daily volume of 151.6 million.

The sell-off followed a hotter-than-expected inflation report for September. The data raised worries about more rate hikes from the Federal Reserve and a higher cost of capital, which could slow the AI trade.

Long-dated bond yields rose after the release before trimming their gains. That added pressure to tech stocks, which were already shaky on elevated yields, rising debt and bubble concerns.

Other chip names took hits too. ASML fell 3.9%, Micron fell 4.1%, SK Hynix fell 6.1% and Oracle fell 8.8%.

The chip sell-off began earlier in the week. Memory makers Marvell and SK Hynix dropped in recent sessions on worries about Chinese competition.

Debt Worries Hit the AI Trade

CoreWeave (CRWV) fell more than 16% after a chart of the company’s bond yields spread on social media. The drop pointed to concerns about its debt-heavy balance sheet and its rising interest costs.

Any slowdown in AI spending could hurt chipmakers, which have been the main winners of data center buildouts. Investors are also debating whether that spending can earn enough in return.

Investor Michael Burry is betting against the Nasdaq and chip stocks. He argues that customers may struggle to make money from costly AI capacity.

Nvidia also faces competition from AMD, Intel’s lower-cost inference chips, custom accelerators and Huawei. Reports say its China AI-chip market share has fallen to 34%.

Insider selling is also in the news. CFO Colette Kress sold 34,918 shares on September 17 at an average $219.05, under a pre-arranged plan. Insiders have sold about $399 million of stock over the past three months.

Analysts Stay Bullish

Not everyone is gloomy. Analysts rate Nvidia a consensus “Buy,” with five Strong Buy, 49 Buy and one Hold rating. The average price target is $321.89.

The company beat estimates in its last report on August 26. It posted earnings of $2.22 per share against a $2.09 forecast, on revenue of $96.22 billion.

The board approved a $150 billion buyback on September 28. That covers up to 2.8% of the company’s shares.

Nvidia also announced a five-year, $250 million compute commitment for U.K. AI safety research. It is also reportedly weighing a larger investment in Reflection AI, though those talks remain speculative.

The stock sits near its 50-day moving average of $223.39. Its 200-day average is $210.37, and its market value is about $5.33 trillion.

On Thursday, TSMC reports quarterly results. Investors expect profit to rise 60%, and ASML warned it may not fully meet demand in 2027 and 2028.